A firm will usually choose to increase its advertising expenditures
What will be an ideal response?
when the expected gain in revenue exceeds the expected additional cost of doing so.
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In the modern Keynesian model, velocity
a. varies positively with the level of the interest rate but not with income. b. varies positively with the level of the interest rate and with income. c. is constant. d. varies in the short run but is constant in the long run. e. none of the above
Our measurement of output per worker is called:
A. productivity. B. production growth rate. C. nominal output. D. None of these is true.
Which of the following best describes the crowding-out effect?
a. An increase in government expenditures will cause taxes to rise, which will reduce both aggregate demand and output. b. An increase in borrowing by the government will push interest rates upward, which will lead to a reduction in private spending. c. An increase in borrowing by the government will decrease the money supply and, thereby, reduce aggregate demand. d. An increase in government expenditures will cause the general level of prices to fall and, thereby, reduce aggregate demand and output.
Owners of buildings can expect to collect ____ economic rent in the long run.
A. much B. marginal C. a competitive D. little or no